Abstract: In this paper, we analyzed the natural gas supply and demand in China in the past 20 years. Compared the forecasts of some relevant organizations, we conclude that demand will exceed supply in 20 years and the gap between the supply and demand will be bigger and bigger. But the unreasonable price formation mechanism,the weak infrastructure,the unreasonable consumption structure are the bumps in the road to develop gas industry in China. To ensure the balance of supply and demand, we propose some suggestions about reformation of the price formation mechanism,infrastructure construction, regulation of the gas consumption structure and expansion of supply.